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The Geopolitics of Iceland

Abstract

This working paper analyzes the geopolitics of Iceland that covers an area of 103,125 km² near the Arctic Circle. In 2024, Iceland had 364,036 inhabitants. The main geopolitical problem for Iceland is its central location in the Greenland-Iceland-United Kingdom (GIUK) gap in the defense against Russia, its role as provider in the Sea Lines of Communication SLOC between the United States and Europe and its potential future as trade center for the new shipping routes. On the other hand, it is a small state without an own army. For this reason, the aim of the Icelandic geopolitics is to be embedded in and protected by institutional arrangements. In the military sector, this is achieved by the bilateral agreement with the United States from 1951 who give a security guarantee to Iceland. Iceland provides host support to NATO partners and exercises, as needed. Iceland is economically closely linked to Europe as member of the European Free Trade Area EFTA and the European Economic Area EEA which is the cooperation between EFTA and the European Union EU. As other Nordic States, Iceland is engaged in regional cooperations, the Arctic Council, the Nordic Council and the West-Nordic Council. Iceland is strongly engaged in search and rescue SAR operations with its Coast Guard for an area of 1.9 million km². Strategic issues for Iceland are the Arctic and Security Policy, potential new shipping routes due to the melting ice, the GIUK and GIN gap, the defense of Sea Lines of Communication SLOC and against cyber threats and the EU Membership. The work and the experience in the Arctic Council were the basis for Iceland’s first and second Arctic Policy from 2011 and 2021 with the four key areas international cooperation, climate change, security, and defense and Arctic research. Regarding the shipping routes, the Central Sea Route (TSR) could make Iceland to a very promising place for a large port. Where the Arctic meets with the Atlantic, there are possible gaps (sea passages for the Russians) known by NATO as GIUK (Greenland, Iceland, and United Kingdom) and GIN (Greenland, Iceland, and Norway). As Iceland is in the center of GIUK and GIN gaps, the NATO carries out air-surveillance missions from Iceland. Air policing from Iceland is also a part of the 2026 Exercise Arctic Sentry. Based on the availability of cheap energy resulting from the high geologic activity in Iceland, the country has a rapidly growing data center industry. The country hosts pivotal digital infrastructures and deep-sea cables of crucial importance to NATO and the broader Euro-Atlantic region. Also, Iceland’s satellite communication infrastructure, includes several essential ground stations for the NATO. For this reason, Iceland is a target for malicious cyber activities. Iceland plans to reactivate the EU accession procedure which could be a major strategic gain for the European Union in the Arctic Region. However, an EU membership still faces major obstacles. Iceland already has the Hoyvík Agreement with the Faroe Islands that established a single economic area. Furthermore, there is a free trade agreement (FTA) with China since 2013. If both agreements are not suspended, an EU accession of Iceland would factually include the non-EU member Faroe Islands into the EU and open a free-trade door for China into the EU. In summary, while Iceland’s geopolitics was successful in ensuring military and economic stability by agreements with the United States and Europe, several strategic challenges need to be resolved in the near future.

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The Geopolitics of Iceland

Author: Saalbach, Klaus
Year: 2026
DOI: 10.48693/887
Source: https://osnadocs.ub.uni-osnabrueck.de/bitstream/ds-2026030114650/1/Geopolitics_Iceland_2026_Saalbach.pdf
Geopoli ics_Iceland 1
Apl. P o . D . D . K. Saalbach
Geos a egy and Geopoli ics
Depa men 1
49069 Osnab ueck
The Geopoli ics o Iceland
02 Ma ch 2026
Summa y
This wo king pape analyzes he geopoli ics o Iceland ha co e s an a ea o 103,125 km² nea
he A c ic Ci cle. In 2024, Iceland had 364,036 inhabi an s. The main geopoli ical p oblem o
Iceland is i s cen al loca ion in he G eenland-Iceland-Uni ed Kingdom (GIUK) gap in he
de ense agains Russia, i s ole as p o ide in he Sea Lines o Communica ion SLOC be ween
he Uni ed S a es and Eu ope and i s po en ial u u e as ade cen e o he new shipping
ou es. On he o he hand, i is a small s a e wi hou an own a my. Fo his eason, he aim o
he Icelandic geopoli ics is o be embedded in and p o ec ed by ins i u ional a angemen s. In
he mili a y sec o , his is achie ed by he bila e al ag eemen wi h he Uni ed S a es om 1951
who gi e a secu i y gua an ee o Iceland. Iceland p o ides hos suppo o NATO pa ne s and
exe cises, as needed. Iceland is economically closely linked o Eu ope as membe o he
Eu opean F ee T ade A ea EFTA and he Eu opean Economic A ea EEA which is he
coope a ion be ween EFTA and he Eu opean Union EU. As o he No dic S a es, Iceland is
engaged in egional coope a ions, he A c ic Council, he No dic Council and he Wes -No dic
Council. Iceland is s ongly engaged in sea ch and escue SAR ope a ions wi h i s Coas Gua d
o an a ea o 1.9 million km².
S a egic issues o Iceland a e he A c ic and Secu i y Policy, po en ial new shipping ou es
due o he mel ing ice, he GIUK and GIN gap, he de ense o Sea Lines o Communica ion
SLOC and agains cybe h ea s and he EU Membe ship. The wo k and he expe ience in he
A c ic Council we e he basis o Iceland’s i s and second A c ic Policy om 2011 and 2021
wi h he ou key a eas in e na ional coope a ion, clima e change, secu i y, and de ense and
A c ic esea ch. Rega ding he shipping ou es, he Cen al Sea Rou e (TSR) could make
Iceland o a e y p omising place o a la ge po .
Whe e he A c ic mee s wi h he A lan ic, he e a e possible gaps (sea passages o he
Russians) known by NATO as GIUK (G eenland, Iceland, and Uni ed Kingdom) and GIN
(G eenland, Iceland, and No way). As Iceland is in he cen e o GIUK and GIN gaps, he NATO
ca ies ou ai -su eillance missions om Iceland. Ai policing om Iceland is also a pa o he
2026 Exe cise A c ic Sen y. Based on he a ailabili y o cheap ene gy esul ing om he high
geologic ac i i y in Iceland, he coun y has a apidly g owing da a cen e indus y. The coun y
hos s pi o al digi al in as uc u es and deep-sea cables o c ucial impo ance o NATO and
he b oade Eu o-A lan ic egion. Also, Iceland’s sa elli e communica ion in as uc u e,
includes se e al essen ial g ound s a ions o he NATO. Fo his eason, Iceland is a a ge
o malicious cybe ac i i ies. Iceland plans o eac i a e he EU accession p ocedu e which
could be a majo s a egic gain o he Eu opean Union in he A c ic Region. Howe e , an EU
membe ship s ill aces majo obs acles. Iceland al eady has he Hoy ík Ag eemen wi h he
Fa oe Islands ha es ablished a single economic a ea. Fu he mo e, he e is a ee ade
ag eemen (FTA) wi h China since 2013. I bo h ag eemen s a e no suspended, an EU
accession o Iceland would ac ually include he non-EU membe Fa oe Islands in o he EU
and open a ee- ade doo o China in o he EU. In summa y, while Iceland’s geopoli ics was
success ul in ensu ing mili a y and economic s abili y by ag eemen s wi h he Uni ed S a es
and Eu ope, se e al s a egic challenges need o be esol ed in he nea u u e.
Geopoli ics_Iceland 2
Con en
1 The Geopoli ics o Iceland .................................................................................................................... 3
1.1 In oduc ion ................................................................................................................................... 3
1.2 The Map o Iceland ........................................................................................................................ 3
1.3 His o y ........................................................................................................................................... 4
2 Ins i u ional F amewo k ....................................................................................................................... 4
2.1 O e iew ........................................................................................................................................ 4
2.2 Mili a y .......................................................................................................................................... 5
2.3 Economy ........................................................................................................................................ 5
2.4 Regional Coope a ion .................................................................................................................... 6
3. S a egic Issues .................................................................................................................................... 8
3.1 Iceland’s A c ic and Secu i y Policy ............................................................................................... 8
3.2 New Shipping Rou es ..................................................................................................................... 8
3.3 The GIUK and GIN Gaps ................................................................................................................. 9
3.4 Sea Lines o Communica ion SLOC and Cybe Th ea s .................................................................. 9
3.5 EU Membe ship ............................................................................................................................. 9
4 Summa y ............................................................................................................................................. 10
5 Re e ences .......................................................................................................................................... 11
Geopoli ics_Iceland 3
1 The Geopoli ics o Iceland
1.1 In oduc ion
This wo king pape analyzes he geopoli ics o Iceland ha co e s an a ea o 103,125 km² nea
he A c ic Ci cle. In 2024, Iceland had 364,036 inhabi an s. The main geopoli ical p oblem o
Iceland is i s cen al loca ion in he G eenland-Iceland-Uni ed Kingdom (GIUK) gap in he
de ense agains Russia, i s ole as p o ide in he Sea Lines o Communica ion SLOC be ween
he Uni ed S a es and Eu ope and i s po en ial u u e as ade cen e o he new shipping ou es.
On he o he hand, i is a small s a e wi hou an own a my. Fo his eason, he aim o he
Icelandic geopoli ics is o be embedded in and p o ec ed by ins i u ional a angemen s.
1.2 The Map o Iceland
Map o Iceland
Sou ce/Au ho : File: Iceland posi ion144.png- Wikimedia Commons
Da e Decembe 2007
Au ho s: Lence + Ulamm
No changes made he e.
Page URL: h ps://commons.wikimedia.o g/wiki/File:Iceland_ posi ion144.png
License: C ea i e Commons A ibu ion-Sha e Alike 3.0 Unpo ed ia Wikimedia Commons
Link o license: h ps://c ea i ecommons.o g/licenses/by/3.0/deed.en
Iceland co e s an a ea o 103,125 km² nea he A c ic Ci cle, he egion abo e 66o34’ la i ude
No h. Eigh A c ic S a es ha e e i o y in he A c ic Ci cle: Uni ed S a es (Alaska), Russia,
Canada, Iceland, Denma k (G eenland), No way, Sweden, and Finland. I s geologic loca ion
on he bo de o he Ame ican and Eu opean con inen al c us explains he high geologic
ac i i y which p o ides ich ene gy sou ces. I is e y close o he A c ic Ci cle, bu he small
Geopoli ics_Iceland 4
G imsey Island 25 kilome e s no h o Iceland is pa ially wi hin he A c ic Ci cle
1
. The
ollowing map shows he loca ion o Iceland be ween he Uni ed Kingdom and G eenland
which oge he o m he GIUK gap whe e he Russian No he n could mo e in o he A lan ic
Ocean. No h o GIUK, he Russian lee needs o pass he GIN (G eenland-Iceland-No way)
egion i s .
1.3 His o y
The i s Icelandic S a e was o med in 930 and exis ed o mo e han 300 yea s. In 1286,
Iceland came unde con ol o No way. As No way and Denma k we e uni ed in he Union o
Kalma in 1380, i belonged om he e on o Denma k and s ayed wi h Denma k when he
Union o No way and Denma k ended in 1814. In 1845, he old Icelandic pa liamen , he
Al hing, was es o ed, and in 1874 he King o Denma k g an ed Iceland a sepa a e
cons i u ion
2
. In 1904, Iceland was gi en au onomy by a Home Rule, and in 1918, Iceland and
Denma k o med a Union which ga e Iceland so e eign y excep o he o eign ela ions which
we e s ill handled by Denma k. The King o Denma k was also King o Iceland. The ini ial
du a ion o his ag eemen was 25 yea s
3
, i.e., un il 1943, bu in 1940, Denma k was occupied
by Ge many and he Uni ed Kingdom decided o occupy he Fa oe Islands and Iceland be o e
Ge many could do. In 1941, he B i ish oops handed Iceland o e o he Uni ed S a es which
al eady had occupied G eenland. In Augus 1944, Iceland decla ed i s independence and
became a epublic un il oday. Iceland has a Coas Gua d, bu no a my. Iceland was a ounding
membe o he NATO in 1949 and made a de ense ag eemen in 1951 wi h he US Iceland
De ense Fo ce on he base in Ke la ík. In 2006, he Uni ed S a es decided o wi hd aw agains
Iceland's will
4
. Bu he 2006 amendmen o he 1951 ag eemen cla i ied ha he Uni ed S a es
could s ill use and e u n o hei base and Iceland also allows NATO membe s o conduc
NATO ope a ions om Iceland, as needed
5
. Following a inancial c isis in 2007/2008 wi h
bank up cy o he h ee la ges banks, a massi e de alua ion o he Icelandic cu ency and a
c edi c isis
6
, Iceland decided o apply o EU membe ship, which led o he s a o accession
nego ia ions in 2011. In 2013, he Icelandic go e nmen decided agains joining he EU due o
dispu ed ishing quo as and concluded a ee ade ag eemen wi h China
7
. In esponse o he
g owing ins abili y o he global poli ics
8
, Iceland decided in 2024 o eac i a e he EU
accession nego ia ions by a e e endum in 2027
9
which now will be done al eady in Augus
2026 which could be a majo s a egic gain o he Eu opean Union in he A c ic Region.
2 Ins i u ional F amewo k
2.1 O e iew
The main geopoli ical p oblem o Iceland is i s cen al loca ion in he G eenland-Iceland-
Uni ed Kingdom (GIUK) gap in he de ense agains Russia, i s ole as p o ide in he Sea Lines
o Communica ion SLOC be ween he Uni ed S a es and Eu ope and i s po en ial u u e as ade
cen e o he new shipping ou es. On he o he hand, i is a small s a e wi hou an own a my.
Fo his eason, he aim o he Icelandic geopoli ics is o be embedded in and p o ec ed by
ins i u ional a angemen s. In he mili a y sec o , his is achie ed by a bila e al ag eemen wi h
1
O’Rou ke e al. 2025
2
LSE 2025
3
LSE 2025
4
G eenland Commi ee 2020
5
S a e Depa men 2006
6
Halldo sson/Gyl i 2010
7
Dams e al. 2020
8
She alo ich 2026
9
Hegedüs 2026, Lecle c 2026
Geopoli ics_Iceland 5
he Uni ed S a es who gi e a secu i y gua an ee o Iceland and Iceland p o ides hos suppo o
NATO pa ne s and exe cises, as needed
10
.
While he mili a y sec o is domina ed by he Uni ed S a es, i is economically closely linked o
Eu ope as membe o he Eu opean F ee T ade A ea EFTA and he Eu opean Economic A ea
EEA which is he coope a ion be ween EFTA and he Eu opean Union EU. Iceland is again
discussing a membe ship wi h he EU.
While Iceland iews i sel clea ly as Eu opean coun y, he opinion on he EU is highly ola ile.
In c isis si ua ions like he inancial c isis and he uns able wo ld o de o oday, he o e s a e
suppo ing an EU accession as a sa e ha en, hey could u n agains EU i he poli ical p ice
ega ding ishing and so e eign y is pe cei ed as oo high. When China was suppo i e a e
he inancial c isis, Iceland u ned o China ins ead o he EU in 2013.
As o he No dic S a es, Iceland is engaged in egional coope a ions, he A c ic Council, he
No dic Council and he Wes -No dic Council.
2.2 Mili a y
Iceland was a ounding membe o he NATO in 1949 and made a de ense ag eemen in 1951
wi h heUni ed S a es which deployed he US Iceland De ense Fo ce on he na al ai base in
Ke la ík. In 2006, he Uni ed S a es decided o wi hd aw om i s Ke la ík base agains
Iceland's will
11
, bu meanwhile, he US Depa men o De ense (DoD) es ablished he DoD
A c ic S a egy 2024
12
.
The 2006 amendmen o he 1951 ag eemen cla i ied ha he Uni ed S a es could s ill use and
e u n o he base and Iceland also allows NATO membe s o conduc NATO ope a ions om
Iceland, “as is necessa y o suppo he u u e de ense needs o Iceland and o he No h A lan ic
T ea y A ea”
13
. In July 2007, he NATO No h A lan ic Council decided o ca y ou ai -
su eillance missions om Iceland o wo o h ee weeks du a ion on a e age h ee imes a
yea
14
. Fu he mo e, he US awa ded in 2016 con ac s o upg ade Ke la ik o p o ide “a high
le el o eadiness o U.S. Ai Fo ces in Eu ope”.
15
In Feb ua y 2026, he new NATO exe cise A c ic Sen y was s a ed. The Ge man Ai Fo ce
deployed 4 igh e je s on he Ke la ik ai base o ai policing
16
.
Iceland has a domes ic police o ce and a Coas Gua d o sea ch and escue (SAR) ope a ions,
he p o ec ion o he Ke la ik Ai Base, he Ai De ense Sys ems and i s emo e ada and
communica ion si es
17
.
2.3 Economy
The Eu opean F ee T ade Associa ion (EFTA) was ounded in 1960 by Aus ia, Denma k,
No way, Po ugal, Sweden, Swi ze land, and he Uni ed Kingdom wi h he S ockholm
Con en ion which was upda ed and eplaced in 2001 by he Vaduz Con en ion.
Meanwhile, he EFTA consis s o Iceland, Liech ens ein, No way, and Swi ze land; Iceland
joined in 1970. Howe e , Iceland also had a ee ade ag eemen wi h he Eu opean Economic
Communi y (EEC) since 1972.
18
The EEC was pa o he Eu opean Communi ies (EC) which
10
Sigholm e al. 2024
11
G eenland Commi ee 2020
12
DoD 2024a
13
S a e Depa men 2006
14
Childs 2022, Dean 2023
15
Childs 2022, Dean 2023
16
Bundesweh 2026
17
Sigholm e al. 2024
18
Lecle c 2006

Geopoli ics_Iceland 6
was ans o med o he Eu opean Union (EU) in 1992. In 1992, Iceland, Liech ens ein, and
No way o med wi h he EU he Eu opean Economic A ea (EEA) which came in o o ce in
1994. The EU and he EFTA membe s con ol he EEA oge he in Join Commi ees.
19
Iceland joined a ious EU p og ams and coope a ions such as he No he n Dimension
20
. In
2021, he Eu opean Commission p esen ed an A c ic s a egy ha ocuses on A c ic p o ec ion,
sus ainable de elopmen , and in e na ional coope a ion, aiming o a mo e ac i e ole. In
o eign policy, he A c ic S a egy iden i ies he No he n Dimension and G eenland as key
p io i ies
21
. Since 2007, he No he n Dimension has been a coope a ion be ween he EU,
Russia, No way, and Iceland o he Bal ic and Ba en s Sea egion in he a eas o en i onmen ,
economy and social a ai s, anspo and logis ics, and cul u e, which was a ec ed by Uk aine
con lic
22
. Iceland is also a signa o y o he Schengen ea y and Dublin egula ion on asylum
23
.
In July 2025, he EU and Iceland signed a memo andum o unde s anding (MoU) on enhancing
coope a ion on ishe ies and ocean a ai s and also coope a e h ough he EU's Agency o he
Space P og am (EUSPA). The EU and Iceland wan o enhance hei secu i y coope a ion, bu
only complemen a y o he NATO ag eemen s
24
.
Bu a e he inancial c isis, Iceland signed a ee ade ag eemen wi h China and o he
ag eemen s, like he esea ch ag eemen s be ween he Pola Resea ch Ins i u e o China (PRIC)
and he Icelandic Cen e o Resea ch (Rannís) wi h he China-Iceland A c ic Obse a o y
(CIAO) in Ka holl.
Iceland was a ounding membe o he Asian In as uc u e In es men Bank o acili a e
pa icipa ion in he Chinese Bel and Road Ini ia i e
25
.
The Fa oe Islands ha e ee ade ag eemen s wi h se e al coun ies, bu he mos impo an is
he Hoy ík Ag eemen wi h Iceland om 2005, ha en e ed in o o ce in 2006. This ag eemen
es ablished a single economic a ea o he e i o ies o bo h coun ies, wi h ee mo emen o
goods, se ices, capi al, and pe sons
26
.
2.4 Regional Coope a ion
The A c ic Council is an impo an pla o m o Iceland. The wo k and he expe ience in he
Council we e he basis o Iceland’s i s and second A c ic Policy om 2011 and 2021.
The A c ic Council o he eigh A c ic s a es Uni ed S a es (Alaska), Russia, Canada, Iceland,
Denma k (G eenland), No way, Sweden, and Finland was ounded by he O awa Decla a ion
1996 as in e go e nmen al o um o he A c ic Region. The Council is based on consensus and
does no handle secu i y and mili a y aspec s
27
.
The Council has adop ed h ee legally-binding ag eemen s, he Ag eemen on Coope a ion on
Ae onau ical and Ma i ime Sea ch and Rescue (SAR) in he A c ic (2011), he Ag eemen on
Coope a ion on Ma ine Oil Pollu ion P epa edness and Response in he A c ic (2013), and he
Ag eemen on Enhancing In e na ional A c ic Scien i ic Coope a ion (2017)
28
. Fo secu i y
ma e s, discussion o a we e es ablished, he A c ic Secu i y Fo ces Round able (ASFR) in
19
Ál a ez López/Razauskas 2024
20
Founda ion Robe Schuman 2025
21
EC 2001
22
Ál a ez López/Razauskas 2024
23
Founda ion Robe Schuman 2025
24
Lecle c 2006
25
G eenland Commi ee 2020
26
Fa oe Go e nmen 2025
27
O’Rou ke 2024
28
B imme 2023, O’Rou ke 2024
Geopoli ics_Iceland 7
2011 and he A c ic Chie s o De ense (ACHOD) Fo um in 2012
29
. In 2016, he A c ic Coas
Gua d Fo um (ACGF) was ounded
30
.
Iceland is s ongly engaged in SAR ope a ions wi h i s Coas Gua d in he ACGF amewo k.
Iceland’s sea ch and escue a ea is 1.9 million km², mo e han wice he size o he Icelandic
exclusi e economic zone
31
. Iceland claimed an ex ended con inen al shel (ECS) in 2009 a he
esponsible Uni ed Na ions Commission on he Limi o he Con inen al Shel (CLCS) and
ecei ed a a o able ecommenda ion om he CLCS in 2016.
32
Iceland is also a membe o he o he egional coope a ions, he No dic Council and he sepa a e
Wes -No dic Council.
The Helsinki T ea y o 1962
33
is he legal basis o he No dic Coope a ion and he No dic
Council, he o icial body o No dic in e -pa liamen a y coope a ion be ween No way,
Sweden, Finland, Denma k, Iceland, and he sel -go e ned coun ies G eenland, he Fa oe
Islands, and he au onomous egion o Åland
34
. Wi hin he No dic Council o Minis e s as
pla o m in e -go e nmen al coope a ion, he Fa oe Islands, G eenland, and Åland a e also
ep esen ed, bu do no ha e o ing igh s
35
. In 2024, he Fa oe Islands and G eenland decla ed
ha hey would no longe accep hei exclusion om No dic summi s on o eign and secu i y
policy and ha hey wished o become ull membe s
36
An ag eemen was eached o conduc a
legal e iew o he Helsinki T ea y and a e ision is planned in 2026
37
. Howe e , a he end o
2025, he No dic Council c ea ed a ai accompli by amending i s ules o p ocedu e, wi hou
wai ing o he e ision o he Helsinki T ea y. E ec i e Janua y 1, 2026, G eenland, he Fa oe
Islands, and Åland became equal membe s o he P esidium and now pa icipa e equally in all
impo an decisions o he No dic Council
38
.
These de elopmen s could ha e impac on he o he egional o ganiza ion, he Wes -No dic
Council.
The Wes -No dic Council is a pa liamen a y coope a ion be ween Iceland, G eenland, and he
Fa oe Islands
39
. The Council was ounded as Wes No dic Pa liamen a ian Council o
Coope a ion in 1985, he yea when G eenland le he EU. As he Fa oe Islands we e no in
he EU as well, i was a coope a ion ou side he EU. Howe e , he e a e annual mee ings
be ween ep esen a i es o he Eu opean Pa liamen and he Wes No dic Council
40
. The
pa liamen s o he membe s send ep esen a i es o he Wes No dic Council wi h he Annual
Gene al Mee ing as mos impo an egula e en . Iceland has exp essed an inc eased in e es
o wo k mo e wi h i s neighbo s om G eenland and he Fa oe Islands
41
. As Iceland and he
Fa oe Islands al eady ha e an economic union and as bo h he Fa oe Islands and G eenland a e
looking o independence, he council could se e as a poli ical pla o m o all ac o s. Thei
s a egic key asse would be he con ol o la ge sea a eas and he ich ishing g ounds.
29
Däume 2021, Rachold 2022
30
Däume 2021
31
Iceland 2021
32
O’Rou ke e al. 2025
33
O icial ile o he No dic Council o Minis e s and No dic Council 2018
34
Åland is an au onomous and demili a ized a ea o Finland
35
Ed a dsen 2025
36
Dam 2024, Ed a dsen 2024
37
Ed a dsen 2025
38
No dic Council 2025.
39
EP 2009
40
Ál a ez López/Razauskas 2024
41
Ha s einsdó i 2025
Geopoli ics_Iceland 8
3. S a egic Issues
3.1 Iceland’s A c ic and Secu i y Policy
The A c ic Council is an impo an pla o m o Iceland. The wo k and he expe ience in he
A c ic Council we e he basis o Iceland’s i s and second A c ic Policy om 2011 and 2021.
The i s A c ic policy was c ea ed o s eng hen Iceland wi hin he A c ic Council
42
while he
second A c ic policy “Iceland’s Policy o Ma e s Conce ning he A c ic Region”
43
om
Oc obe 2021 was buil on Iceland’s 2019-2021 chai manship o he A c ic Council
44
. A special
ocus is he clima e change and he impac on he A c ic egion. The mel ing o he ice may
open new shipping ou es (Sec ion 3.2)
45
. The ou key a eas o he 2021 A c ic Policy a e
in e na ional coope a ion, clima e change, secu i y, and de ense (naming Russia and China as
po en ial isks) and A c ic esea ch.
46
In 2023, Iceland upda ed i s Na ional Secu i y Policy
47
. The aim is o ensu e Iceland’s b oad
secu i y in e es s h ough ac i e in e na ional collabo a ion also in he ma i ime a eas. The
NATO is seen as key pilla o Iceland’s de ense oge he wi h he 1951 De ense Ag eemen
be ween Iceland and he Uni ed S a es o Ame ica
48
.
3.2 New Shipping Rou es
The mel ing o ice due o he global wa ming opens h ee po en ial shipping ou es in he No h,
he No he n Sea Rou e (NSR, No heas Passage) a ound No he n Russia, he No hwes
Passage (NWP) h ough he Canadian A c ic Islands and he Cen al Sea Rou e (T anspola
Sea Rou e TSR). The new sea ou es a e cu en ly no pe manen ly ice- ee, bu a e expec ed o
be mos ly ice- ee be ween 2030 and 2040
49
. Iceland’s and China’s ocus is on he Cen a Sea
Rou e (TSR). Looking o wa d o new po en ial shipping ou es, China has plans o a la ge
shipping po in No heas Iceland. China men ioned he new sea ou es in hei A c ic Policy
om 2018
50
.
The Cen al Sea Rou e (TSR) goes h ough he cen e o he A c ic and could make Iceland o
a e y p omising place o a la ge po
51
. The No hwes Passage (NWP) goes h ough he
Canadian A c ic Islands and Canada a gues ha he NWP is in i s e i o y while he Uni ed
S a es hold he opinion ha his is an in e na ional sea ou e wi h eedom o na iga ion and
o e ligh
52
. While on he map his ou e looks sho and a ac i e, i is qui e di icul o
na iga e and meanwhile, i is ques ionable whe he he ou e is comme cially iable
53
.
In con as o he o he (s ill hypo he ical) shipping ou es, he e is a g owing ac i i y in he
No he n Sea Rou e (NSR, No heas Passage) a ound no he n Russia which is signi ican ly
sho e han he no mal Sou he n Sea Rou e SSR a ound India. Russia and China al eady
in es ed in a ious No heas Passage p ojec s o anspo gas om Sibe ia o China
54
.
42
Ha s einsdó i 2025
43
Iceland 2021
44
Dean 2023
45
Remi o So ian 2025
46
Dean 2023
47
Al hingi 2023
48
Al hingi 2023
49
G eenland Commi ee 2020
50
Iceland 2021
51
Gomes 2022
52
Gomes 2022
53
O’Rou ke e al. 2025
54
Fe nández-Mon esinos 2023
Geopoli ics_Iceland 9
3.3 The GIUK and GIN Gaps
Whe e he A c ic mee s wi h he A lan ic, he e a e possible gaps (sea passages o he Russians)
known by NATO as GIUK (G eenland, Iceland, and Uni ed Kingdom) and GIN (G eenland,
Iceland, and No way). Du ing cold wa , he NATO ou es deployed he Sound Su eillance
Sys em (SOSUS) and ma i ime pa ol ai c a s like he P-3 O ion as ea ly wa ning elemen s o
an i-subma ine wa a e (ASW)
55
. The a ea no h o Scandina ia is known as he ‘bas ion a ea’
whe e he o me So ie Union and now Russia has signi ican nuclea o ces wi h nuclea -
a med ballis ic missile subma ines (SSBNs) in an ice- ee egion wi h he Kola peninsula
56
; i
is a huge, pe manen ly ice- ee a ea
57
. The NATO base in he Fa oe Islands suppo s he so-
called bas ion de ense
58
. As Iceland is in he cen e o GIUK and GIN gaps, he NATO ca ies
ou ai -su eillance missions om Iceland o wo o h ee weeks du a ion on a e age h ee imes
a yea
59
. Ai policing om Iceland is also a pa o he 2026 Exe cise A c ic Sen y.
3.4 Sea Lines o Communica ion SLOC and Cybe Th ea s
Based on he a ailabili y o cheap ene gy esul ing om he high geologic ac i i y in Iceland,
he coun y has a apidly g owing da a cen e indus y. In 2023, Iceland launched he IRIS 108
Tbps (Te abi pe second) unde sea cable sys em linking Iceland o I eland and om he e o
Eu ope. I eland has less s ic da a p o ec ion laws ha a ac many Tech companies.
Iceland hos s pi o al digi al in as uc u es and deep-sea cables o c ucial impo ance o NATO
and he b oade Eu o-A lan ic egion
60
. Also, Iceland’s sa elli e communica ion in as uc u e,
includes se e al essen ial g ound s a ions o he NATO
61
.
Mos o he deep-sea cables a e loca ed sou h o he GIUK gap which makes he gap
su eillance e en mo e impo an
62
.
Fo his eason, Iceland is a a ge o malicious cybe ac i i ies. The Chinese p esence on
Iceland is a ma e o conce n o he Wes and in June 2023, he p o-Russian hacking g oup
NoName057 a acked he Pa liamen ’s websi e and he in as uc u e, and he Compu e
Eme gency Response Team o Iceland (CERT-IS) had di icul ies o handle hese a acks
63
.
3.5 EU Membe ship
Iceland decided o apply o EU membe ship, which led o he s a o accession nego ia ions
in 2011. In 2013, he Icelandic go e nmen decided agains joining he EU due o dispu ed
ishing quo as and concluded a ee ade ag eemen wi h China
64
. In esponse o he g owing
ins abili y o he global poli ics, Iceland decided in 2024 o eac i a e he EU accession
nego ia ions by a e e endum in 2027
65
which now will be done al eady in Augus 2026 which
could be a majo s a egic gain o he Eu opean Union in he A c ic Region. The iew o he
EU is ha Iceland’s applica ion has ne e been o icially wi hd awn, bu only suspended, which
means ha he nego ia ions could be con inued which would signi ican ly accele a e he
p ocedu e
66
.
55
Aguia 2026
56
Rachold 2022
57
Rachold 2022
58
Øs e ud/Hønneland 2013
59
Dean 2023
60
Sigholm e al. 2024
61
Sigholm e al. 2024
62
Childs 2022
63
Sigholm e al. 2024
64
Dams e al. 2020
65
Hegedüs 2026, Lecle c 2026
66
Lecle c 2026, She alo ich 2026